Sen. Salazar Fights
for Family Farms and Ranches/ His Bipartisan Bill Exempts Them from
Estate Tax
DENVER, CO
– The value of farmland in many regions of the country has skyrocketed
in recent years, and because of that increase in value, the federal
estate tax can hit family farms and ranches especially hard. Because
many farming and ranching families do not have sufficient assets to
be able to pay the federal estate tax in the event the estate-holder
passes away, the tax can force family farmers and ranchers to sell all
or part of their operation in order to foot the bill.
Last week, United States
Senators Ken Salazar (D-CO) and Pat Roberts (R-KS) introduced the
Family Farm and Ranch Act of 2007, which grants an estate tax
exemption for family farms and ranches that stay in the family and continue
operations after the original estate-holder passes away.
“It is extremely
disheartening to see our Nation’s farmers and ranchers being forced
to sell their land simply because they cannot bear the financial burden
of the estate tax,” said Senator Salazar. “By exempting
family-owned and operated farms and ranches that stay in the family
from the estate tax, we will ensure that those who choose to continue
the agricultural tradition of their forefathers are allowed to do so.”
“As farms are passed
down among the generations, estate taxes have made it increasingly harder
to keep the operation in the family,” Senator Roberts said.
“This legislation will go a long way to keep our young people farming
into the future, preserving our rural way of life and our rural communities.”
Under the Family
Farm and Ranch Act of 2007, a farmer or rancher would not have
to pay any estate tax as long as the following conditions are met:
- In the past eight years
before the decedent’s death, the decedent or a member of his/her family
owned the farm for a cumulative period of at least five years;
- In the past eight years
before the decedent’s death, the decedent or a member of his/her family
must have been actively involved in the management and operation of
the farm for a cumulative period of at least five years;
- The decedent or a member
of his/her family must be using the land for farming purposes on the
date of his death;
- At the time of his/her
death, the decedent must be a U.S. citizen or legal resident of the
U.S.
- EITHER (1) for at least
three of the last five taxable years of the decedent’s life, over
50 percent of his/her income was acquired through the business of
farming, OR (2) the qualified farmland comprises over 50 percent of
the decedent’s adjusted gross estate at the time of death
Moreover, to ensure that
people do not take advantage of this exemption, this legislation would
institute a “recapture tax” in the event that the heir disposes of any
interest in the farmland to anyone outside his family, and/or the heir
ceases to use the property for farming purposes.
“Meaningful financial
relief for family farms and ranches, as well as for small business,
must be part of Congress’ effort to comprehensively and responsibly
reform the estate tax,” said Senator Salazar. “This
bill signals an important first step in the right direction.”
Senators Mike Crapo (R-ID)
and Dianne Feinstein (D-CA) have also signed on as co-sponsors to the
Family Farm and Ranch Act of 2007. Congressman John
Salazar of Colorado (D-03) has introduced similar legislation in the
United States House of Representatives. The text of the Senate version
can be found here.
###
|